*DJ S&PGR Affirms VICI Properties 'BB' ICR; Rates Unsecd Notes

(MORE TO FOLLOW) Dow Jones Newswires

November 18, 2019 10:51 ET (15:51 GMT)

Press Release: S&PGR Affirms VICI Properties 'BB' ICR; Rates Unsecd Notes

The following is a press release from S&P Global Ratings:

-- VICI Properties L.P., a wholly owned subsidiary of VICI Properties
Inc., plans on issuing $1.75 billion in total senior unsecured notes in
seven-year and 10-year tranches. VICI intends to use the proceeds to repay in
full Caesars Palace Las Vegas' CMBS debt, pay fees and expenses, and add cash
to the balance sheet for future acquisitions.
-- We assigned our 'BB' issue-level rating and '4' recovery rating to the
proposed notes.
-- We also affirmed our 'BB' issuer credit rating on VICI.
-- In addition, we revised our recovery rating on VICI's second-lien
notes to '1' from '4', and raised the issue-level rating to 'BBB-' from 'BB'.
We also removed the issue-level rating from CreditWatch with positive
implications. The improved recovery prospects for second-lien noteholders
reflects incremental value from acquisitions that VICI has completed.
-- The stable outlook reflects our expectation that VICI will have ample
cushion compared to our downgrade threshold to absorb our forecasted 0.5x
increase in leverage in 2020 to complete announced acquisitions.

NEW YORK (S&P Global Ratings) Nov. 18, 2019-S&P Global Ratings today took the
rating actions above.

The proposed issuance of unsecured debt to refinance secured debt will
unencumber a meaningful amount of the company's asset base and improve VICI's
financial flexibility and maturity profile.
Prior to the completion of the proposed unsecured debt issuance, VICI has had
all secured debt in its capital structure, which reduced financial
flexibility. We believe VICI's financial flexibility and capital markets
access will improve as it increases the amount of unsecured debt in its
capital structure and begins to unencumber its asset base. Even though the
company plans to raise an additional $2.5 billion in debt to fund announced
2020 acquisitions, at least a portion of which will be secured, we expect that
pro forma for this issuance, unsecured debt will comprise more than 25% of
VICI's capital structure. Notwithstanding the anticipated improvement in
financial flexibility, we believe VICI's capital structure is still heavily
encumbered and we are unlikely to consider higher ratings until the company is
able to shift its capital structure mix to more unsecured debt.

The stable outlook reflects our expectation for minimal cash flow volatility
given the triple-net lease structure under which nearly all of its cash flows
are fixed. Although we expect VICI's leverage will increase about 0.5x in 2020
because of acquisitions, the company has ample cushion compared to our
leverage downgrade threshold to absorb these acquisitions.

We could lower the rating if we no longer expected VICI to sustain leverage
under 7.5x. Given the cushion we expect VICI to have with respect to this
threshold, a downgrade would most likely result from a leveraging acquisition
where VICI is unable or unwilling to raise a sufficient amount of equity to
keep leverage below this level rather than operating performance given the
stability and predictability of its cash flow.

Although we expect VICI's leverage will be under 6x through 2020, we are
unlikely to raise the rating until VICI demonstrates a longer track record of
broader financial markets access, transitions its capital structure further
away from secured debt and further improves its financial flexibility by
increasing the mix of unsecured debt in its capital structure. Additionally,
we are unlikely to consider raising the rating until we can conclude that the
credit quality of its largest tenant, pro forma for its announced merger with
Eldorado Resorts, is not impaired in a manner that would increase VICI's
business or financial risks. Prior to raising the rating, we would also need
to believe that VICI will continue to finance future acquisitions using
sufficient equity proceeds, no matter the condition of the equity markets,
such that leverage would not increase above 6x. Alternatively, we could also
raise the rating if VICI builds in sufficient cushion relative to this upgrade
threshold such that we believe it could absorb large acquisitions without
going above 6x if equity markets are volatile.

RELATED CRITERIA

-- General Criteria: Group Rating Methodology, July 1, 2019
-- Criteria | Corporates | General: Corporate Methodology: Ratios And
Adjustments, April 1, 2019
-- Criteria | Corporates | Industrials: Key Credit Factors For The Real
Estate Industry, Feb. 26, 2018
-- Criteria | Corporates | General: Recovery Rating Criteria For
Speculative-Grade Corporate Issuers, Dec. 7, 2016
-- Criteria | Corporates | General: Methodology And Assumptions:
Liquidity Descriptors For Global Corporate Issuers, Dec. 16, 2014
-- General Criteria: Country Risk Assessment Methodology And Assumptions,
Nov. 19, 2013
-- Criteria | Corporates | General: Corporate Methodology, Nov. 19, 2013
-- General Criteria: Methodology: Industry Risk, Nov. 19, 2013
-- General Criteria: Methodology: Management And Governance Credit
Factors For Corporate Entities, Nov. 13, 2012
-- General Criteria: Use Of CreditWatch And Outlooks, Sept. 14, 2009

Certain terms used in this report, particularly certain adjectives used to
express our view on rating relevant factors, have specific meanings ascribed
to them in our criteria, and should therefore be read in conjunction with such
criteria. Please see Ratings Criteria at www.standardandpoors.com for further
information. Complete ratings information is available to subscribers of
RatingsDirect at www.capitaliq.com. All ratings affected by this rating action
can be found on S&P Global Ratings' public website at
www.standardandpoors.com. Use the Ratings search box located in the left
column.

Primary Credit Analyst: Melissa A Long, New York (1) 212-438-3886;
melissa.long@spglobal.com
Secondary Contact: Ariel Silverberg, San Francisco (1) 212-438-1807;
ariel.silverberg@spglobal.com


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(MORE TO FOLLOW) Dow Jones Newswires

November 18, 2019 10:51 ET (15:51 GMT)

Press Release: S&PGR Affirms VICI Properties 'BB' -2-

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November 18, 2019 10:52 ET (15:52 GMT)